The end of the CARES Act presents a number of immediate challenges for the aviation industry, most notably job security for thousands employed by airlines.
But as Eduardo Angeles, former FAA associate administrator for airports and current managing director and senior counsel for Clark Hill, explained in a recent episode of the AviationPros Podcast, the CARES Act expiration will create a domino effect across other facets of the industry that are dependent on passenger volume.
“The ripple effects of layoffs at the airlines are absolutely dramatic,” Angeles said.
Among those affected are ground handling service providers – both ground handlers employed by the airlines facing furlough and layoff decisions and third-party contractors.
“There is no one that’s spared in these types of travesties. Everything has a ripple effect,” Angeles said. “If you’re a third-party provider, whether your vendor on the airside or whether you’re in the terminal, when you don’t have the kind of volumes that you need to sustain your books, you’re going to be impacted.
“I already know that many vendors have other contracts placed on hold and some of their contracts have been terminated outright, simply because, as I indicated, you don’t see a horizon with respect to when this pandemic is going to end.”
Angeles did point to potentially positive result for the general aviation (GA) as passenger traffic lost in the airline sector could be redirected to FBOs.
“I think the GA community businesses, the small fixed base operators and those folks, I think their business will actually go up and improve because a redefining of what is safe to travel in, there’s been a greater emphasis placed on the GA community,” Angeles said.
To listen to Angeles’ complete conversation with Airport Business editor-in-chief Joe Petrie about the impact of the CARES Act ending, visit https://www.aviationpros.com/21156768.
